Study: Ohio State Bucks Bowl Ticket Trend

Bowl payouts seem relatively straightforward to those who unknowingly glance only once. The truth is, they're convoluted and aren't terribly logical. As part of a larger, ongoing study of value added by each institution to its conference, an examination of Ohio State's institutional bowl expense reports show the Buckeyes deviate from one otherwise consistent problem: the ability to sell bowl tickets.

Each year, participating schools making a bowl appearance must file an expense report with the NCAA detailing the total amounts spent on travel, meals, promotional events as well as list the number and amounts of tickets committed (and sold). Ohio State's reports were accessed through Ohio's public records law. All states except Pennsylvania and Delaware have open records laws, though Arkansas and Tennessee only grant requester's rights to state residents.

When schools commit to accepting a bowl invitation, along with the hefty payout comes a burdensome obligation: the liability of face value for its ticket allotment. This allotment is often up to 10,000 tickets for traditional New Year's Day games at $75 a pop and as much as 20,000 tickets for BCS games averaging over $125 apiece.

The NCAA's 2011 annual report on bowl receipts and expenses, aggregated from institutional surveys, show almost $19 million in tickets absorbed by participating schools and their conferences. That's over $271,000 per the 70 schools that played in a game last season. The 10 BCS participants, however, were on the hook for a staggering $766,715 in unsold tickets -- though reportedly Connecticut was responsible for over $2 million alone thanks to selling less than 3,000 of their allotted 17,500 tickets for last year's Fiesta Bowl.

Closer inspection of Ohio State's reports show the Buckeyes are coming out ahead in this department. Examination of OSU's past seven bowls show the Buckeyes were committed to a total of 107,239 tickets at a total face value of over $17.14 million. The Buckeyes sold 92,408 (86.2%) of their allotment despite appearances in California, Arizona (twice) and Texas. The Big Ten and Ohio State combined to absorb a total of $1.7 million, though over $200,000 was from the 2007 BCS National Championship where commitments to the block party and tailgate were unsold. That leaves about $242,000 in ticket absorption per year -- well under the national average, especially the BCS average where unsold tickets are far more penalizing.

Interestingly, ticket allotments are far from the most perplexing portion of the bowl structure.

When conferences negotiate with bowls, they attempt to leverage higher payouts based on the ability to market teams to sponsors and television carriers. Of the 35 existing bowls, 23 are legally non-profit organizations (seven of the 12 private bowls are owned by ESPN). These bowls negotiate higher payouts if they believe they can receive more in rights fees from the networks and sponsorship fees from corporate sponsors.

While the bowls might pay a higher stipend to each participating conference, they usually shift the burden back to the conference by stipulating a certain number of tickets be sold by the institution. This means the value of each unsold ticket is deducted from the payout. But that's the least of it. 

Bowls that have a corporate sponsor often have to pay a sponsorship fee to the networks as part of their broadcast agreement. This fee is often upwards to $750,000 a year. Some bowls actually expense the sponsorship fee among the conferences, meaning the payouts don't take into account unsold tickets or the cost of the sponsorship fee. So a payout of $3 million, with a $750,000 sponsorship fee split among the two teams, and $500,000 in unsold tickets means the conference may only receive $2.2 million of its advertised $3 million payout.

For that reason, when someone states a team was selected to a bowl because of how well they travel: that's only partially true. Bowls aren't on the hook for those tickets as typically, it's usually the institution. The bowls will just deduct from the payout for tickets that aren't sold. Most of the general admission tickets are sold well in advance of the teams being announced, so the bowls are more worried about staying relevant in television ratings than necessarily the ability to sell tickets. There is certainly an indirect effect, however, as many of these NPOs are run by locals that are attempting to boost the impact of a bowl game on the local economy. That's where fans matter.

Ohio State's success in travel can be brought into context with a comparison to Florida State. An examination of Florida State's past five games show that 73 percent of their 59,000 tickets were sold. However, Florida State had to travel an average of 722 miles for its past five games, including two in-state bowl appearances, whereas the average distance for Ohio State's past six games is nearly double that (1,520 miles).

Despite the Buckeyes' savings on wasted tickets, only last year's Sugar Bowl showed a direct profit for Ohio State ($288,875). The other five games show a loss. That's another confusing aspect of the bowls.

While schools often do lose money on bowls, on the whole they're financially beneficial. FBS schools reported $190 million in excess bowl revenue over expenses in 2011. Over $35 million of that was from non-BCS bowls. 

When conferences receive bowl payouts, most of them pool together all the revenues and stipulate an expense allowance for each school participating in a bowl that season. The allowances vary based on size of the bowl and distance that will be traveled. Any unsold tickets that are absorbed by an institution is simply deducted from that school's allowance. If the conference absorbs the amount, it's taken from the total pot that is distributed to league members. 

If a school has an allowance of $1 million and spends $1.1 million on expenses, with another $100,000 in unsold tickets, the school will be paid $900,000 by the league (to account for the smaller bowl payout from unsold tickets). That means the school lost $200,000. However, it will still receive its share of conference bowl payouts which, in the case of the Big Ten, is split evenly among all schools regardless of whether they attended a bowl.

In other words: bowls are profitable, but schools aren't always in better shape attending one themselves. 

Last year, all bowls combined accounted for a payout of $280 million before expenses. The NCAA Tournament paid back nearly $450 million from revenues generated from the NCAA Tournament. An NCAA FBS playoff would likely quadruple the total revenue and do away with the antiquated bowl structure. 

But at least Ohio State will sell wherever it goes.